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Investing

A photo of Anonymous Anonymous
I recently attended a guest speaker's conference in which I learned about starting to invest early.

There are several threads in this forum describing on how to earn and save money, but what you do with your savings is just as important and can save you years of work.

A simple scenario to make my point:

Let's say at the age of 25, an individual makes an initial investment of $1000 in mutual funds (or other long term investing options). If that person invests only $100 per month wisely, after when he/she is at the age of 65, it would have accumulated to approximately $600 000.

That is a lot of money.

Also try to buy less items that depreciate over time and buy things that appreciate.

Put your money to work.

http://www.mackenziefinancial.com/calc/jsp/EarlyInvesting/EarlyInvesting2.jsp

The above is a simulator that can calculate how much you are likely to make if u start investing today.

Pardon my grammar, I am just a high-school student.
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A photo of Anonymous Anonymous
The problem with those little mathematical calculators is two fold:

1) Firstly, the rate of interest is typically high and fixed, which would never occur in real life (not over decades).

2) Secondly, in your example you mentioned that $600,000 is a lot of money, in 50 years inflation will have eaten most of its value. With the Federal Reserve in the states printing unprecedented quantities of money, and lax fiscal policy around the world, were in for a long and dramatic period of inflation. If your not familiar with what inflation is recall how you parents (better yet your grandparents) talked about how they could watch a movie for a nickel, or that there house cost $30,000 dollars? Now a cup of specialty coffee is $5.00 (which used to be a days wage), and you'd be lucky to go to a movie for less than $15.00. You'd need to earn massive interest rates in order to keep up.
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A photo of jenny12sohn jenny12sohn
Also, banks advertise these things about how investing can pay off in a few years, but it actually takes a really long time, and it is more effective if you invest a lot of money, not just $100.
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